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Block shares fall despite earnings beat due to economic worries

A drop in bitcoin trading affected the company's total net revenue, but Square and Cash App are still growing along with the newly acquired Afterpay business.

Jack Dorsey

Jack Dorsey's Block reported earnings Thursday.

Photo: Protocol

Block reported second-quarter earnings that just topped analysts’ estimates, but shares fell as investors digested the effect of the macroeconomic environment on the company’s core payments businesses. Bitcoin volume also dragged on total revenue.

Block, headed by Jack Dorsey, reported adjusted earnings per share of $0.18, beating analysts expectations of $0.16 per share, compared to $0.66 a year ago.

Gross profit was $1.47 billion, a tick below analysts’ expectations of $1.48 billion but up 29% compared to $1.14 billion in profit a year ago.

Both the Square seller unit and Cash App consumer unit grew 29% year-over-year in the quarter.

Meanwhile, the company’s "buy now, pay later" business, acquired through Afterpay, started to boost the company’s business.

Total net revenue was $4.40 billion, down 6% from a year ago, driven by a drop in bitcoin revenue. But revenue excluding bitcoin was $2.62 billion, which was up 34% year-over-year.

Dorsey has made bitcoin a cornerstone of the company's future strategy, but despite adding bitcoin trading services, those long-term bets haven't yet resulted in a significant lift to the company's overall business.

Shares fell about 5% in after-hours trading. Shares in Block have fallen sharply this year along with the rest of the fintech market but have been on the rise in recent days.

Tomio Geron

Tomio Geron ( @tomiogeron) is a San Francisco-based reporter covering fintech. He was previously a reporter and editor at The Wall Street Journal, covering venture capital and startups. He was also as a staff writer at Forbes covering social media and venture capital, and edited the Midas List of top tech investors. He can be reached at tgeron@protocol.com or tgeron@protonmail.com.

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